Student loan repayment to pause again

The federal student loan repayment moratorium expires this May 1. Or will it? Will the Biden administration defer repayment again, as his Democratic buddies push to forgive those loans completely?

The student loan mess

The student loan burden became a problem even before the COVID affair. Simply put, many Americans have gone to college, borrowed money to go, and now can’t pay their loans back. Or if they could, student loan repayments consumed a big chunk of their income. Forty million Americans have this problem.

Of course, during COVID, the government flat-out told people to stay home – and not work. So in March of 2020, Congress passed the CARES Act. Which provided, among other things, that students wouldn’t have to repay their student loans right away. President Trump has had a hand in extending the relief, and so has President Biden since he took over. The latest extension of the student loan moratorium runs out on May 1. But Biden is now hinting that he will extend it further, through August. Even that doesn’t satisfy Democrats in Congress, as nearly a hundred of them want it to go through the year. Some want Biden to forgive those loans completely – but even he is smart enough to know that would take an Act of Congress. Which he would never get through the Senate. And after Midterms, forget it.

The current cry for forgiveness or extension includes the reality of inflation. But many economists correctly point out that any further relief could make inflation itself worse. So, bottom line, this would not help. And so far, no one is talking about whether the students involved will always have a bad credit rating, regardless.

How we got to this pass

America has come to this pass by wrongly deciding that everyone should have a shot at going to college. News flash: college does not benefit everyone. CNAV has gone over this before – nearly three years ago in fact. The reason we covered it then was that the usual suspect – Senator Elizabeth Warren (D-Mass.) – had then called for universal free college.

But as we said then, people are going to college for the wrong reasons, or in totally unrealistic job expectations. Yes, I remember the Get a Good Education PSAs of the Sixties. But those PSAs played in a different world, and might have been wrongheaded anyway. That’s when mothers scornfully asked their boys whether they wanted to be ditch diggers all their lives. Well, somebody has to dig the ditches, and doing that should never shame anyone.

The real problem was that colleges got flush with all sorts of financial-aid packages. So naturally they wanted to fill their classes and dorms (or Greek-letter houses). And they raised their prices, too. When they did that, they also turned college into an expensive spa.

The best kind of college education, that will really prepare you to pay back all that money you have to borrow, is going to be in:

• STEM (Science, Technology, Engineering and Mathematics), or:
• Organization and management education.

And art or music, if you have real art-gallery or concert-hall talent. And law, if you enjoy an argument. But America has too many lawyers, anyway.

The financial aid scandal

More recently, we hear of the lawsuit against Brown, Georgetown, Columbia, Caltech, and a few others, who allegedly cooked up a scheme to reserve financial aid to the children of their big donors. The case of Henry v. Brown University is still in court, with the universities pledging to slug it out. The legal theory concerns a law that lets colleges offer shared financial and distribution guidelines for students who have gotten in, but only if they do not consider at all whether the student “needs” the help. By reserving the aid to the big donors, the suit says, the colleges are breaking the spirit of the law. We’ll have to wait and see how that case plays out.

Student loan programs pay for the wrong kind of education

But we should now talk about an even bigger scandal, about what kind of education students are getting. That they’re not getting the kind of education that reliably gets them good jobs, is bad enough. But now – as CNAV has also covered – colleges are turning themselves into Stanford Prison Experiments. Yale University especially has ended up forming a student Stasi, yelling at fellow students to put on their masks, and getting them kicked out if they tell these Stasi artists to go pound sand.

As bad as that was, Yale Law School had a worse scandal last month. Someone came to the school to talk about freedom of speech. And several Yale Law students shouted the presenters down. That situation got so ugly that Judge Laurence Silberman of the U.S. Court of Appeals for the District of Columbia, actually sent a warning to his fellow jurists. The warning said: don’t hire any of these Yale Law students, who disrupted that event, as clerks. They clearly don’t understand Constitutional law. Perhaps the bigger scandal is that not every federal judge agreed with that.

Is this the kind of education for which we want to put the American taxpayer on the hook to pay? Are we to agree to universal college education and to cancel everyone’s student loan debt, to train up students to be snitches, internal security force members, or just plain thuggish brownshirts? Not on your life!

It has to stop

So America has two problems with college. Not only is it too expensive, but today it teaches the wrong thing. When a federal judge says that a certain law school is not teaching Constitutional law and simple rules of etiquette in a civil and free society, we should listen.

For both these reasons, CNAV recommends only one answer to any further student loan extension or especially forgiveness: No. N-O, NO! It ill befits a Senator even to recommend that, because in any other context, the police would call that fraud.

Yes, that still leaves forty million people who got the worst possible advice all the way down the line, for years. Several students, who didn’t get the scholarships they thought they should have gotten, sued over that. Maybe they should be suing over the advice they got to spend four years at an expensive spa and take courses preparing them for jobs (like faculty jobs) they’d never get, or paid or volunteer positions on the political campaigns of candidates who dispense even more of this bad advice. But regardless: forget this notion of college for everyone, and then maybe tuition will come down And while we’re at it, let’s fix the problem of teaching students to be good little snitches and brownshirts. That alone would be worth ending federal student loan programs.